Musk Ordered to Pay $2 Billion In Twitter Shareholder Lawsuit, Found Liable But Absolved of Fraud

By: Leanne Maxwell

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The jury in a lawsuit over Elon Musk’s 2022 takeover of Twitter found he misled investors by claiming he might walk away over the platform’s bot estimates, prompting some to sell during a downturn before he ultimately went through with the original deal — but fraud claims were dropped.

Nine jurors spent almost four days deliberating the arguments laid out as part of a class-action lawsuit during the nearly three-week trial at San Francisco Superior Court, as KQED reports, filed just before Elon Musk completed his $44 billion acquisition of Twitter in 2022, as SFist reported at the time.

The jurors found Musk misled investors by publicly questioning the platform’s bot estimates and suggesting the deal could be paused, which attorneys argued drove down the company’s stock price in the weeks after he signed a binding agreement, but they rejected claims that he engaged in a broader scheme to defraud investors.

The Associated Press reports that Musk could owe about $2.1 billion in damages to shareholders who sold stock during that period, but per KQED, that figure could be closer to $2.6 billion when both shares and stock options are calculated. According to the plaintiffs’ lawyers, damages will likely take six months to reach the plaintiffs. Per the AP, Musk is currently worth an estimated $814 billion, much of it through Tesla shares.

On the stand, as KQED reports, Musk said his tweets reflected his personal views and were not intended to manipulate the market, while reiterating his belief that Twitter had understated the number of bots, at times claiming most replies to his posts were spam.

He tweeted that the deal was “temporarily on hold” over bot concerns, per SFist, then hours later said he remained committed, before again suggesting days later that bots could make up as much as 20% of users, as KQED reports. During that stretch, Twitter’s stock fell nearly 18%.

After attempting to withdraw, Twitter sued in Delaware to enforce the agreement, per the AP. Just before trial, Musk reversed course and agreed to complete the purchase at the original price, per SFist.

The AP reports that shares had fallen to about $33 — roughly 40% below the agreed purchase price — during the uncertainty, losses the lawsuit ties to investors who sold amid the volatility. Musk argued that completing the deal at the original price ultimately benefited most shareholders.

“I can’t control whether people sell their stock, but everyone who held the stock fared extremely well,” Musk said.

Plaintiffs argued Musk’s statements came as Tesla’s stock declined and the deal became more costly, alleging he sought to drive down Twitter’s share price to renegotiate or exit the agreement, as the AP reports. Their attorney said the tweets were deliberate, not impulsive, and urged jurors to compensate investors who sold at a loss after Musk said the deal was “on hold.”

“He was basically saying the company was a sham,” said Mark Molumphy, a lawyer for the plaintiffs.

“Twitter was an important institution in San Francisco,” before Musk took it over, Molumphy said, per KQED. “It was not a sham; it was a real company, and the way he dragged it through the mud in order to basically get a better deal was atrocious.”

Musk’s legal team repeatedly sought a mistrial, arguing he could not receive a fair trial in San Francisco due to public bias.

Attorneys for the plaintiffs called the verdict a precedent, signaling that executives must carefully consider public statements in high-stakes deals.

“Going forward, this will have a real chilling effect,” said Monte Mann, a Chicago-based business litigation partner told KQED. “Executives and dealmakers will need to think carefully about how public statements can be interpreted — not just as disclosure, but as part of the negotiation itself.”

The case reportedly marks the first time a jury held Musk liable for his social media posts, though he had previously been acquitted in a 2018 Tesla-related investor case, as SFist reported in 2023.

“It’s an important victory, not just for investors of Twitter, but for the public markets,” said Joseph Cotchett, an attorney for the plaintiffs, per the AP. “I think the jury’s verdict sends a strong message that just because you’re a rich and powerful person, you still have to obey the law, and no man is above the law.”

SAN FRANCISCO, CALIFORNIA – MARCH 04: Elon Musk arrives at federal court  on March 4, 2026 in San Francisco, California. Musk is on trial in a  civil case for allegedly manipulating Twitter’s stock price prior to his  purchase of the company in 2022. (Photo by Josh Edelson/Getty Images)

Article Appeared @https://sfist.com/2026/03/21/musk-ordered-to-pay-2-billion-in-twitter-shareholder-lawsuit-found-liable-but-absolved-of-fraud/